11 July 2016

It’s fair to say that our post-Brexit economic climate has introduced a considerable level of uncertainty. With doom-mongers queuing up to say “I told you so” and the Governor of the Bank of England hinting at an interest rate cut plus all manner of other financial measures to steady the good ship Blighty, you’d be forgiven for thinking the economic outlook doesn’t look good.

Granted, it does look a little uncertain, and that’s the one thing the financial industry hates. And it’s this uncertainty that’s probably led to some of the panic in the City. However, against a backdrop of plunging graphs and glum-looking analysts, Auto Retail Network sources say that footfall has remained steady for now, and they’re pleasant surprised at the lack of EU referendum fallout. Factor in the SMMT’s positive forecast for 2016 despite June’s slight drop – around 2.7 million registrations, up from 2015’s 2.63 million – and it’s not yet time to run screaming to the hills. Certainly this is better news than what’s happening on the high street. Big retailers are already feeling the pinch and footfall is down. 

Plus, you can bet the banks and finance houses are monitoring transactions and sales activity like hawks. And when they spot a downward trend we’ll hear about. One fly in the ointment is the prospect of a delayed reaction from consumers to the current economic uncertainty. If the BoE does cut rates or a general decline gathers momentum towards the end of the year, we’ll look back on the summer months as a calm honeymoon period. Same thing for OEMs who have hedged their currencies; think of the present as a ‘grace period’ before prices and incentives change.

It’s a big ‘if’ but, given the unchartered economic waters we are in, these issues can’t be ignored. What was it the Chancellor said about mending the roof when the sun was shining? Something tells me it might be wise to boost your resilience now, before the sea becomes a little choppy.

Iain Dooley

Editor, Agenda

Auto Retail Network

Tags: Brexit, economy, honeymoon, retail, sales